Is It Beneficial To Invest In RV Parks?

Over the years, recreational vehicles (RVs) have made road trips and traveling around the country exciting and affordable for millions of families in America. In the past, when you thought of RVs, you mainly associated them with family summer road trips or retirement. In recent years, we’ve not only seen RV ownership continue to rise but also an increase in Americans embracing RV living, often living in their RVs for several months or even years at a time. With RVs steadily rising in popularity, investing in RV parks is an excellent opportunity to diversify your portfolio and maximize your returns.

Highlighting 3 Benefits Of Investing In RV Parks

With rising interest rates and inflation at all-time highs, it’s never been a better time to own hard assets, such as real estate. On the upside, there are a ton of great asset classes in real estate. Even so, the question is, with so many assets to choose from, where should you invest?

I’m personally invested in several areas of real estate but, in the spirit of “skating where the puck is going to be”, I diversified into mobile home parks several years ago and, more recently, RV parks. Like mobile home parks, investing in RV parks has generally gone unnoticed until recently but is an excellent investment option for both new and seasoned investors.

Whether it’s seeking new ways to unwind or embarking on a life on the road, recreational vehicles (RVs) and RV parks are skyrocketing in popularity across the country. In today’s post, we’ll take a look at some of the top benefits of investing in RV parks.

Benefit #1 Of Investing In RV Parks: Demand, Demand, Demand

To start, demand is outpacing supply right now. In 2021, Go RVing concluded their RV Owner Demographic Profile Study with Ipso. According to their study, there has been a 62% increase in RV ownership since 2001, and RV ownership is at all-time highs with 11.2 million households owning an RV in 2021.

On top of this, 2022 has already shown an increase in new RVs sold compared to 2021, and this year is also expected to have the highest number of new RVs sold in a year. For instance, the RV Industry Association’s January 2022 survey of manufacturers concluded that total RV shipments this past January ended with 53,290 units, which was an increase of 16% compared to the 45,930 units shipped during January 2021.

There are more than 90 million camper households in North America alone. Additionally, within the next five years, it’s projected that another 5 million will join their ranks. Now, in comparison, there are only about 8,700 RV parks right now in the United States.

The demand for RV Parks clearly surpasses the supply of available sites for RVs.

Top 3 Benefits Of Investing In RV Parks
(Photo Source: Canva)

Benefit #2 Of Investing In RV Parks: Less Consolidated

Unlike some of the other subclasses in real estate, a great benefit of investing in RV parks is that it’s one of the least consolidated. For instance, one of the main drawbacks of multifamily is that it’s highly consolidated. There is a ton of institutional interest in the multifamily space with over half of A and B-class properties owned by institutional investors. However, this isn’t the case for RV parks.

As of earlier this year, in 2022, the data showed that out of the 8,700 parks in the U.S. over 95% are owned by what we would call “mom and pop owners”, which means that they own no more than 5 RV parks. 

While cap rates are still reasonable, this type of fragmentation in the industry is an excellent opportunity for smaller buyers to be active in purchasing these parks. Moreover, the cap rates haven’t been super compressed by institutional investors jumping into this space. 

Keep in mind though, that this is changing very fast as the perks of investing in RV parks are becoming increasingly apparent to more investors. 

Benefit #3 Of Investing In RV Parks – Great Cash Flow & Driving Appreciation

One of the main reasons why so many savvy investors choose real estate, in general, is because they can generate steady cash flow and drive appreciation. RV parks are no different as they generally have very strong cash flow and there are plenty of opportunities to drive appreciation. 

For instance, some of the ways you can drive greater revenue and boost cash flow include: 

  • Optimizing merchandise sales in your camp store
  • Implementing rentals, such as golf carts, bikes, mopeds, etc.
  • Utilizing dynamic pricing (adjusts price based on the park’s occupancy)
  • Utilizing site lock fees (additional fees in order to acquire desirable locations within a park)
  • Implementing good marketing strategies in order to increase occupancy
  • Expanding the park (with more space, the more incremental revenue you can drive)

Taking The Next Step On Your Financial Freedom Journey

Whether you’re new to real estate or a seasoned investor, I highly recommended thinking about adding RV Parks to your investment portfolio. With the popularity of RVing skyrocketing and more investors every day jumping into this space, you’ll want to stay ahead of the curve in order to enjoy more of the benefits that RV park investing has to offer. 

Would you like to know how you can benefit from adding RV parks to your investment portfolio? Are you ready to take back control over your time? If you want to accelerate your financial freedom journey, Click Here to schedule a free zero-commitment call with me today! Together let’s take the next step on your journey to winning back your time!

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